Regular event reporter, Gerald Brent, on an event that looked at the emerging contractual and reputational issues surrounding influencers and their work with brands
Alice Esuola (Commercial Associate, Bristows) chaired the fascinating session which took place on 12 November 2021. Her two speakers included Hayley Brady (Partner, Head of Media and Digital, UK, Herbert Smith Freehills) and Josh Charalambous (Senior Associate, RPC).
It's worth mentioning the context: digital advertising is set to become a larger advertising segment than traditional advertising (i.e. print, radio and television), and a large part of its ecosystem relies on the labour of a burgeoning class of individual. "Influencers", "talent", "brand ambassadors" – all these terms refer to individuals paid by marketers to increase sales, brand value or some other advertising metric, perhaps engagement or by leveraging their digital social networks. These individuals, often, do this by touting the benefits of the commissioning marketer's / brand's goods or services on social media, although this is too simplistic a description in an age where the marketability of intertextuality and memes, (see Dogecoin for example) is mainstream. Whilst the use of celebrity in advertising is not new, perhaps never have so many individuals in society, as influencers, gone to work as agents in the advertising ecosystem. The important point to have in mind here is that these influencers might indeed be bona fide celebrities but, increasingly, are otherwise simply 'normal' people with material numbers (usually four figures or more) of followers on a social media platform.
Josh first talked about the importance of the e-sports and gaming sectors to the digital advertising and influencer ecosystem, emphasising the sacrifice at work: brands are, despite the contracting exercise, engaging in a loss of control in exchange for engagement. By relinquishing tight control of public messaging, clients are rewarded with a more authentic route to audience and, therefore, engagement.
In terms of the downside risks, particularly for e-sports, Josh noted the relatively unregulated nature of the sector worldwide, especially when compared to the more mature traditional sports sectors, leaving influencers in the newer sector subject to less 'behavioural control'. The speakers considered issues underlying the rationales behind use of morality and anti-embarrassment clauses, including influencer drug-use or other brand-reputation issues which accompany working with certain influencers.
Hayley noted the various considerations a brand should consider when selecting an influencer and contracting with them including; who else the influencer works for; what the influencer is promoting; the origin of the influencer and his/her public profile; IP; the influencer's number of followers and their demographics; and where the advertising/marketing materials have originated. Hayley noted that, increasingly, brands are contracting directly with influencers, as opposed to employing the traditional middleman marketing agency. The regulatory landscape in the UK, in the form of the ASA's CAP Code and the CPUTs (Consumer Protection from Unfair Trading Regulations 2008) were cited as the key sources of rules, here, covering commonly engaged areas such as misleading adverts, disclosures (e.g. #advert), freebies, competitions, regulated products, comparative advertising, and celebrities.
Use of "synthetic" influencers, (that is non-human accounts) offers a route around the risk and uncertainties with engaging with humans, enabling control and execution to remain entirely in the hands of the commissioning marketer.
The main risks (regulatory, IP and reputation) which Hayley outlined should remain in the minds of marketing agencies, their clients and their clients' professional advisors. This is especially important – as was addressed in the Q&A – because the limitations of a contract's efficacy to prevent these risks was acknowledged: the speakers agreed on collaborative working / influencer guidance being potentially more effective than a contract here. Indeed, Hayley had not seen many brands suing influencers (with a view to an award of damages), with the much more common action taken to simply terminate and walk away.
The onus to safeguard the influencer was also addressed by the speakers, something which might have been overlooked amidst the regulatory-focus on protection of consumers. The example of the ex-Love Island star whose celebrity is used to push the products of the highest-paying brand raises concerns that, in the absence of a sophisticated approach to contracting, influencers – their worth in the marketplace / their credibility / their reputations – might to some degree be at the whims of the marketing executives commissioning them and the potentially disreputable nature of their campaigns / products.
Contemporary advertising has come a long way from the print media slogans of the 20th century ("got milk?"). As computing power and the speed of telecommunications increases, the only sure thing seems to be that the way products and ideas are promoted to people will change. Instagram only launched in 2010, begging the question as to what type of equivalent SCL webinar we might all be benefiting from in 2032…
Gerald Brent is an associate in the Commercial team at Addleshaw Goddard, advising on data protection and IP issues.